Great Moments in Business Intelligence: Liquid Soap

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The Business Idea

Liquid SoapWay back in 1865, William Shepphard decided to clean up New York City. Literally. He patented (#49,561 to be exact) the “discovery that by the addition of comparatively small quantities of common soap to a large quantity of spirits of ammonia or hartshorn is thickened to the consistency of molasses…”

Yes, this invention was liquid soap.

Shepphard knew he had a bubbly goldmine on his squeaky clean hands. After all, what were the public’s other options at the time? Bar soap? Hard to keep stocked in public bathhouses. Powdered soap? Messy and gritty. Here was a soap to rule all soaps.

The Business Scenario

Soap MoneyBy 1980, liquid soap was ready for prime time and the Minnetonka Corporation would be the company to bring it to the unwashed masses. But it wasn’t going to be easy. Not only were they going to have to sell a new form of soap to people, but they had to compete with other, much larger soap companies who would inevitably copy the idea. Colgate (Irish Spring) and Proctor & Gamble (Ivory) were huge at the time, with much deeper pockets. How was Minnetonka supposed to compete against such soap bar-barians?

 

The Business Intelligence

Minnetonka couldn’t stop the fat cats from copying their slick product, but could prevent them from actually getting their copysoaps to market. Understanding that households everywhere would need a clever way to dispense the liquid soap, or the entire idea would be a messy flop, Minnetonka bought up all the plastic pump dispensers in the country.

No lie (or we’ll wash our mouth out). These pumps were only made in a few factories, and Minnetonka knew about all of them. They figured that even if the larger soap companies wanted to copy liquid soap, they’d have no way to actually package them in order to sell them.

The gamble actually paid off and Minnetonka enjoyed a monopoly on liquid soap for quite a while (we’re sure the name Soft Soap might ring a bell), until their competition finally caught up…by buying them.

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Samuel Clemens
Samuel Clemens
Sam is founder and chief of product & marketing for InsightSquared. Previously, Sam was VP Product at HubSpot, VP Product at BzzAgent, and on the founding team at Elance.com. His background also includes venture capital with Greylock Partners, the Algorithms group at Amazon.com, and management consulting with Booz Allen Hamilton. Sam has an MBA from Harvard Business School and a B.S. in Applied Math from Yale. In his off time he dives shipwrecks in the New England area.
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